Pensioners and elderly citizens see red as their much-needed earnings from savings certificates squeeze for yield-rate cutbacks under government debt-servicing pressures, sources say.
The public debt buildups prompt the government to further lower yields on savings certificates in a belt-tightening measure that stokes concerns about erosion of earnings of elderly retirees dependent on the gains.
Ministry of Finance data show domestic public debt hovered around Tk 11.57 trillion back on March 31, 2025 in a 36.5-percent increase since June 30, 2022.
Internal Resources Division (IRD) of the MoF, in a notification dated Tuesday, cut down the maximum returns from the government instrument to 10.59 per cent and the minimum to 8.74 per cent.
Family Savings Certificate, the most popular instrument under the National Savings Directorate (NSD), and Pensioners Savings Certificate profit rate has been reduced by 1.39-percentage points each.
Data available with the NSD show the yield for pensioners and family savings certificate down to 11.80 per cent, as of June 2025, from 13.19 per cent and 13.45 per cent respectively in 2015.
Economists have found such cutbacks on savings certificates profit won't help the government much to minimize debt pressure as it has a tiny share in government borrowings.
Dr Abu Eusuf, professor at Dhaka University's Department of Development Studies, says pressure on interest payment for high-cost domestic borrowing may be the reason to cut yield, but it would help little to minimize the burden.
Rather, a large section of senior citizens, retired private-sector employees, women would be affected with the cuts as they are dependent on this secure investment tools, adds Dr Eusuf, also Executive Director of the Research and Policy Integration for Development (RAPID)
"I recommend for the government to cut high-cost borrowing from the largest sector such as bank borrowing and focus on mobilisation of domestic revenue."
The profit rates were last revised downward in July. Under the structure, investors with smaller investment will receive relatively higher returns, while profit rates will decline for larger investments.
The investment threshold has been fixed at Tk 750,000. Investments up to this mark will qualify for higher profit rates, while returns will be lower on investments exceeding the ceiling.
The Family Savings Certificate will now offer returns of 10.54 per cent at maturity for investments up to Tk 750,000 over its five-year tenure, down from 11.93 per cent.
For investments above the Tk 750,000 slab, the profit rate has been reduced to 10.41 per cent from 11.80 per cent.
For the Pensioner Savings Certificate, the profit rate at maturity for investments up to Tk 750,000 has been lowered to 10.59 per cent from 11.98 per cent. In the case of investments exceeding that mark, the return has been cut to 10.41 per cent from 11.80 per cent.
The profit rate on the five-year Bangladesh Savings Certificate has also been revised downward. Investments up to Tk 750,000 will now earn 10.44 per cent at maturity, compared to 11.83 per cent previously. For investments above the threshold, the rate has been reduced to 10.41 per cent from 11.80 per cent.
Returns on the three-month-interval profit-bearing savings certificate have also declined. Investments up to Tk 750,000 will now fetch 10.48 per cent at maturity, down from 11.82 per cent, while investments above the limit will earn 10.43 per cent, reduced from 11.77 per cent.
The notification clarifies that all national savings schemes issued before July 1, 2025, will continue to enjoy the profit rates applicable at the time of issuance throughout their original tenure. However, in the case of reinvestment, the profit rate prevailing on the reinvestment date will apply.
Under the IMF's $4.7-billion-loan programme, Bangladesh is required to ensure that no more than 25 per cent of its fiscal deficit is financed through savings instruments. The lending package also mandates aligning NSC returns with market-based rates.
Net investment in savings certificates plunged to Tk 3.37 billion in Sept 2025 -- down 96 per cent from Tk 83.32 billion a year earlier. As lending rates climb, commercial banks have raised deposit rates, prompting savers to move funds away from NSCs.
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